Drug Decriminalization and Employment: Evidence from Oklahoma's State Question 780

Abstract

This paper estimates the employment effects of Oklahoma's State Question 780 (SQ 780), which reclassified simple drug possession from a felony to a misdemeanor effective July 2017. Using a difference-in-differences design with American Community Survey microdata, I compare employment outcomes in Oklahoma to neighboring states before and after implementation. The main results show a small, statistically insignificant increase in employment of 0.20 percentage points in the full population. However, heterogeneity analysis reveals significant positive effects for Hispanic individuals (+1.05 pp, p$<$0.001) and marginally significant gains for young Black males (+0.86 pp, p=0.06) and individuals without a college degree (+0.30 pp, p=0.09). These findings suggest that drug decriminalization may benefit populations historically most affected by drug enforcement, though the overall population-level effects are modest. The results contribute to the growing policy debate on criminal justice reform by providing the first microdata analysis of state-level drug decriminalization on labor market outcomes.